Investing.com - Gold futures swung between small gains and losses on Thursday, as the euro plunged after the European Central Bank announced plans to launch an asset-backed securities and covered bond purchasing program.
On the Comex division of the New York Mercantile Exchange, gold for December delivery eased down 0.07%, or 90 cents, to trade at $1,269.40 a troy ounce during U.S. morning hours.
Prices held in a narrow range between $1,267.70 and $1,275.90 an ounce. Futures were likely to find support at $1,261.90, the low from September 3 and resistance at $1,290.90, the high from September 2.
In the euro zone, the European Central Bank slashed its benchmark interest rate to a record-low 0.05% from 0.15%, surprising most market analysts who had expected no change.
The central bank also lowered its deposit facility rate to -0.20% from -0.10% previously and its marginal lending rate to 0.30% from 0.40%.
Speaking at the ECB’s post-policy meeting press conference, Draghi announced plans to launch an asset-backed securities and covered bond purchase program, which will start in October.
The decision came after the latest data showed that the annual rate of euro area inflation slowed to a five year low 0.3% last month. The ECB targets an inflation rate of close to but just below 2%.
The euro plunged more than 1% against the U.S. dollar to trade at 1.3015, the lowest since July 2013.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.64% to hit a 13-month peak of 83.48.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Meanwhile, in the U.S., the Department of Labor said the number of individuals filing for initial jobless benefits increased by 4,000 to 302,000 last week. Analysts had expected jobless claims to rise by 2,000 to 300,000 last week.
The data came after payroll processing firm ADP said non-farm private employment rose by 204,000 last month, below expectations for an increase of 220,000. The economy created 212,000 jobs in July.
While not viewed as a reliable guide for the government jobs report due on Friday, it does give guidance on private-sector hiring.
A day earlier, gold fell to a two-and-a-half month low of $1,261.90 amid confusion over whether Ukraine and Russia had reached a ceasefire agreement in eastern Ukraine.
Ukraine's President Petro Poroshenko said he had agreed on a "permanent ceasefire" in eastern Ukraine with Russian President Vladimir Putin.
However, a spokesman for President Putin subsequently said he had not agreed to a ceasefire as Russia was not party to the conflict.
Also on the Comex, silver for December delivery tacked on 0.25%, or 4.8 cents, to trade at $19.23 a troy ounce.
Elsewhere in metals trading, copper for December delivery jumped 1.18%, or 3.7 cents, to trade at $3.164 a pound.